Bitcoin seller btcQuick hits nearly $2 Million in sales

Bitcoin sales service btcQuick says that it has achieved nearly $2m in sales.

Colorado-based CEO Jerrod Bunce started the company in November 2012, after trying to buy bitcoins and getting frustrated with bitcoin sales site BitInstant, a service that enabled customers to buy and sell bitcoin but which was criticized for its slow service.

“I thought to myself ‘I can build this to be better’,” he said. He then coded the site in PHP, using the Twitter Bootstrap front end.

When users request to purchase bitcoins using US dollars, btcQuick buys the equivalent amount in bitcoins from an exchange, which it then sends to the customer's bitcoin address, or to their email address using Inputs.io.

The firm started slowly, growing with the help of $120,000 in funding from private investors and crowdfunding, says Bunce. It has grown substantially over the last few months, according to Bunce, who showed CoinDesk proof of his monthly sales figures. The firm is currently doing a little over $500,000 in business, he said.

BtcQuick’s model is to be among the fastest to provide bitcoins, if not necessarily the cheapest. It charges a 7.5% fee on transactions, but this can slide to as little as 3% given enough volume. Transactions made by credit card are settled in a couple of hours.

Most of its sales (70.5%) are from the US, said Bunce, who added that the company is also selling to users in countries including Canada, Australia, Argentina, China, Germany and the UK. On average, a single transaction is $175. Bunce said:

“We have mainly been spread around by word of mouth, but have recently started advertising on reddit, dailybitcoins and via Google CPC ads.”

Customers are expected to go through verification procedures by proving their identity, says the firm, which then allows them to purchase bitcoins using a credit or debit card. “I expect this to change as we work towards FinCen compliance,” he concluded.

The company doesn’t yet have compliance, but is working with US lawyer Marco Santori (the Bitcoin Foundation's regulatory affairs committee chair) on this issue.

In the meantime, Bunce is contemplating pulling out of three US states – New York, California, and Texas – until the issue is resolved.

“California and New York don’t hold a large percentage of our business,” he says. Those two states have both hit bitcoin-related organisations with subpoenas or warning notices in the past few months.

In the meantime, btcQuick is doing its best to follow KYC rules and stop fraud on its network. It has a deal with miiCard, under which it uses the site’s identification hardware to verify customer identities. It gives customers who use Miicard a 1% discount from the original fee as part of a silver membership

The company also uses a fraud detection system from Signifyd, which Bunce says offers the firm greater assurance that malicious actors are not trying to game its network.

The site that inspired Bunce, BitInstant, which was operated by New York-based Charlie Shrem, shut down on 13th July to work on a service upgrade. The site, which would have been a competitor to btcQuick, has still not reopened. It was subsequently hit with a class-action lawsuit by angry customers.